Walmart agrees to $100M settlement over fraudulent transactions in Spark Driver program

Walmart is agreed to pay $100 million to settle a lawsuit from the Federal Trade Commission (FTC) over fraudulent practices within its Spark Driver service, which uses gig workers to deliver online orders from local stores to customers. The vendor was accused of misleading drivers about their potential pay and surcharges, and then misleading customers by saying that 100% of the tip went to the drivers, when they did not.

At its beginning complaintThe FTC was joined by Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin. The lawsuit alleges that Walmart, beginning in 2021, misrepresented Spark Driver’s finances.

In this case, Walmart was accused of often dividing the customer’s order between drivers, which could lead to the distribution of tips. In the meantime, customers were told that their driver – as in one driver – would get the full tip. In batch orders, Walmart removes tips from other orders without notifying the operator. Walmart also promised tips to drivers in advance of ordering, but failed to collect a tip from the customer, leaving the driver completely tipless.

Other issues related to Walmart’s reduction in drivers’ wages after they accepted offers or other false incentives that would have given drivers extra money.

Walmart also told customers that drivers would get 100% of their tips, but that wasn’t always true.

The lawsuit alleges that the practice caused drivers to lose millions of dollars in promised money and led to numerous consumer complaints.

As a result of this settlement, Walmart must implement a revenue verification program to ensure that drivers are paid their promises and tips. It is also prohibited to change the base payment, incentives, or tips after the initial payment, unless the driver fails to provide service or the customer cancels. Walmart is prohibited from misrepresenting its earnings to future drivers.

“Labor markets cannot function properly without accurate and non-misleading financial and other material information,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, in a statement about the settlement agreement. “Today’s settlement reflects the Trump-Vance FTC’s commitment to ensuring a fair labor market for American workers, which is critical to the nation’s prosperity.”